SETTLEMENT AGENTS SUPERVISORY BOARD and STRAND SETTLEMENTS PTY LTD

In the case between Settlement Agents Supervisory Board and Strand Settlements Pty Ltd, the dispute involved the operation of a unit trust scheme that involved real estate agents, and allegations of a kickback arrangement. The parties appeared before the Supreme Court of Western Australia. The Settlement Agents Supervisory Board alleged that Strand Settlements, a settlement agency, had engaged in a practice of providing kickbacks to real estate agents in return for referrals. The Board sought to have Strand Settlements' franchise revoked under section 44(8) of the Settlement Agents Act 1981 (WA).

The court was required to determine whether the allegations of kickbacks constituted a breach of the Settlement Agents Act 1981 (WA) that warranted the revocation of Strand Settlements' franchise. The key legal issue was whether the alleged kickbacks could be considered as rewards for referrals, which are prohibited under the Act. The court also needed to assess whether such conduct warranted the severe penalty of franchise revocation.

The court found that the evidence supported the allegation that Strand Settlements had engaged in a practice of providing kickbacks to real estate agents. The court held that these kickbacks amounted to rewards for referrals, which are prohibited by the Settlement Agents Act 1981 (WA). The court concluded that the conduct of Strand Settlements constituted a serious breach of the Act, warranting the revocation of its franchise. The court emphasised the importance of maintaining the integrity of the settlement agency industry and the need to prevent practices that could undermine public confidence in the industry.

The Supreme Court of Western Australia revoked the franchise of Strand Settlements, effectively prohibiting it from operating as a settlement agency in Western Australia. This decision underscores the importance of compliance with industry regulations and the potential consequences of engaging in prohibited practices.